Getting Your Financial House in Order

In 2021 law firm finances are the new sexy, or at least they should be after everything that happened in 2020. In today’s episode I have invited my guest Shawnna Weber to talk about ways you can crush chaos in the areas of bookkeeping and billing.

In this episode we discuss:

  • How to know it’s time to outsource some of the billing and bookkeeping.
  • Recognizing the value of your time and determining its best use.
  • Determining when a bookkeeper should be brought in-house.
  • Understanding your tax obligations and the different ways taxes are paid into the system along with identifying legitimate business expenses that can be deducted.
  • The differences between your Accountant and Bookkeeper and why you need both.
  • The importance of reviewing your reports for correct expense categories and charges for items no longer used or needed.
  • Key financial reports to review on a regular basis.
  • Using trend reports to anticipate income and determine marketing decisions.
  • The importance of staying proactively involved in your finances.
  • Tips for maximizing your funds as the year comes to a close.

Allison Williams: [00:00:11] Hi everybody, it’s Allison Williams here, your Law Firm Mentor. Law Firm Mentor is a business coaching service for solo and small law firm attorneys. We help you grow your revenues, crush chaos in business and make more money.


Allison Williams: [00:00:25] Hi everybody! Today on the Crushing Chaos with Law Firm Mentor podcast, we are going to have a special guest, Shawnna Weber, who’s going to talk to us about getting our financial house in order. Now, this is not one of those sexy topics that people get all excited about. Most people don’t say I really want to dive into my bookkeeping and tax strategies, but this is a really important topic. If you own a law firm, especially in twenty twenty. OK. This is going to be timeless information, but especially in twenty twenty, because we had so much upheaval with the way in which our economy was impacted by the coronavirus and all of the ramifications from that, as well as having additional money coming in with the PPP and the EIDL loans from the Small Business Administration. We didn’t go into those details. But those details, of course, are all going to impact our financial house this year. So it’s really important that we start looking at ways that we can build into our system of business the efficacy of finance. And Shawnna gave us a lot of, do right now, simple, easy questions to ask, strategies to implement in order to maximize our coins. And so we want to help you crush chaos with your finances by having her on the show. So without further ado, I want to tell you a little bit about Shawnna before today’s episode. Shawnna Weber is the host of the Faces of Finance podcast and the CEO of California based Edgeworth Business Solutions, a business consulting and bookkeeping firm that challenges the traditionally transactional model of financial management. Shawnna founded the company in 2011 with a goal of developing long lasting consultative relationships with clients that allow them to decrease their expenses while driving profitability. And in doing so, Shawnna and her team have managed over 60 million dollars in assets across their client base and have negotiated and implemented strategies saving companies over one million dollars over the past seven years. All right, I want to welcome Shawna Weber to the Crushing Chaos with Law Firm Mentor podcast. Welcome.


Shawnna Weber: [00:02:37] Thank you, Allison, for having me.


Allison Williams: [00:02:39] I am really excited to talk to you because you have one of the topics that I think is one of those much overlooked areas of law firm management. It’s one of those things that I think we all know that we need to get our financial house in order. We know we need to keep good records. We know that we should be organizing our data, getting advice, and we know that we need to make strategy a part of the equation. But I think a lot of people are a little overwhelmed with where to start. And I think once they start getting money in the door, their thought is, let me just make sure I get it done rather than bringing in the help that I think a lot of people realize that they need, but just don’t know how to get into it. So we’re going to go deep into that topic today. And there are a lot of questions that I have for you, especially questions that have come up in our in our Facebook community, the Law Firm Mentor Movement. So I’m just going to dive right on in there. And first thing that comes to mind that I get a lot of questions about is I’d really like to have some more information about when a law firm owner should decide to outsource some of the billing and bookkeeping tasks in the firm and when they should consider having someone full time.


Shawnna Weber: [00:03:46] Well, there’s several indicators and one of those is if you’re submitting bills late to your clients, because getting money in the door is really important, you should consider outsourcing some of the billing. And even though I know sometimes we get a little hung up on, I need to look at every bill and maybe you still do, but at least getting the drafts to you so you can review and letting that person release the bill and also helping you with any questions on the bills or any collection efforts. So kind of taking that out of your hands and really focusing on being able to get those bills out of the door timely really helps with, I know you talk a lot about this, too, is your accounts receivable. So you don’t have this money sitting out there and you are the hang up. And so we also, if you’re going to outsource this billing, we do encourage law firms to set up an email address, say, accounting at your law firm, you know, your domain dotcom, so that all the data resides within your business in case you change the service and it leads to less confusion with your client. So if they see an email coming from accounting at your law firm, they know that’s from you versus just, you know, Shawnna at Edgewood, like, who’s that person? So we find that that’s really helpful.


Shawnna Weber: [00:04:58] And then all of the data obviously resides in that email when you’re doing the billing. So we feel like this is kind of an important thing when you outsource the billing. And then the other indicator is if you’re paying your bills late. So you don’t want to have, you want to avoid late fees or phone calls that you haven’t paid a bill. So there are several ways that will help you manage your invoices through apps. You know, email invoices and so forth. And if you’re using something like QuickBooks online, you can have an outsourced bookkeeper utilize an integrated service like a Bill Dotcom to help you pay your bills timely. And then another really key indicator is if you’re not keeping up with your reconciliation. So bank reconciliations are really vital, but especially your trust account. Reconciliations like that have to be done. And if you find that that’s really, you’re struggling with that, that’s a good thing to outsource. And then the other thing is, if you really hate bookkeeping and you would really rather do anything but bookkeeping and now you have these piles of paper. You don’t even want to think about, you’re ignoring it. The pile is growing and then you get an email from your CPA or maybe your bank and they need information. And now you’re super stressing out and you’re working on evenings and weekends just to get that done, to keep up. Like that’s definitely an indicator.


Shawnna Weber: [00:06:14] And I think it’s important that everyone knows that you can delegate all or just some of these tasks. Just start somewhere, because usually your time is better spent, focused on growing your firm, handling your caseload and even things like your personal care, which is super important. You talk a lot about that as well, and also time spent with your family. So think about what you can delegate. Now, usually the cost of outsourcing isn’t as much as you think. And again, and in your practice, your worth per hour is more than you’re going to pay for bookkeeping. And it just eliminates a lot of stress. So I’d like to say in the words of… There’s a business coach out there as well, Natalie Eckdahl, and she says just because you can do something doesn’t mean you should. And I think that’s really important. And again, you talk a lot about this as well.


Allison Williams: [00:07:02] Yeah. So you give us a lot there. And you know what you said about the idea that your time is worth more than the cost for you to outsource? You know, we talk a lot, we talk a lot about that in the Law Firm Mentor Movement, just about how, you know, when you’re when you’re quantifying your economic value, it’s easy to trade your hour of time at three hundred an hour or two hundred an hour or 500 an hour, whatever your hourly rate is, relative to the cost of paying for it. But I’ve gotten a lot of lawyers that will push back on that and say, OK, so I might outsource this two or three hours worth of work, but I’m really not going to recapture that time. That would be time that I’d be, you know, idling on the weekend. That would be time that I might be, you know, just kind of hanging out, which isn’t high value time. So why should I take the money now and invest in a bookkeeper versus doing it by myself? What would you say to someone who gives you that kind of feedback?


Shawnna Weber: [00:07:58] I would say there’s two things there. One is maybe they enjoy doing the bookkeeping and they want to do it on the weekends. Maybe outsourcing really isn’t for them because they’re able to go ahead and handle that and they wouldn’t be billing time out anyways. Right. Or looking at business growth strategies. Or maybe it’s just something they they don’t mind doing. So I would say in that case, maybe it’s not something you’d want to outsource. I would say, again, if it’s kind of a cause of stress, if it’s causing other issues in your business, if even if you can use that time planning growth strategies or maybe you’re looking at hiring another associate, you know, maybe that’s not billable time, but it is time that is spent working, you know, towards your business goals versus on the bookkeeping. So that’s that’s worth something to it. I mean, it is a cost, but it also frees up your time to really work on strategies other than just transactional work.


Allison Williams: [00:08:47] Yes, I always say to people that, they kind of give me that idea that, you know, even if you can do the bookkeeping, like you said, you know, it doesn’t mean that you should. And even if you’re competent at it, there is something to be said for being the expert at all of the things that you have to do and letting other people be the expert at what they are trained to do rather than keeping that task for yourself. The sooner you get it off of your plate, the less mental chatter you have that’s devoted to all the minutia that really goes into the activity, especially things like bookkeeping.


Shawnna Weber: [00:09:19] Yes. And I would also say, in the same kind of topic is so you’re working with a bookkeeper that has experience with law firms. Well, they may know some strategies or advantages because they work with several versus kind of you and your silo. So that’s kind of another another way to look at it as well.


Allison Williams: [00:09:36] Yeah. So speaking of the silo, you know, if you are the solopreneur or it’s just you. Maybe it’s you and a staff person or, you know, once you, once you start to get a little leverage, it’s beyond you. You know, one of the things that comes up a lot is lawyers that take the position that they don’t know. They know when it’s time to outsource it. Right. When they have too much work to be able to get to it themselves. But they don’t know when they’re so much outsourcing that it makes it counterproductive to have someone outside of the office. And it’s really time to bring that person in. So what would you say to a lawyer? How would you advise them if they’re thinking about bringing someone in-house? Like, what size should they be and what are the pay ranges that you use for an in-house bookkeeper?


Shawnna Weber: [00:10:18] Those are really great questions. And I would say that it’s, again, going to depend really on the volume for that firm. And I would say typically when there’s more than four to six hours per day of work with the billing daily expenses, or you find you need someone in person to interact with based on your billing type, based on the volume of bills. And if you’re working with an outsourced bookkeeper, they should really advise you to let you know, OK, it’s, it’s time now that, you know, we’re doing four hours of work for you per day. And it really is time for you to hire someone in-house. And they should be able to transition those processes to your in-house bookkeeper. And the cost for in-house and outsource can be similar. And that’s because when you hire an employee, you have all those perks, vacation, payroll taxes, worker’s comp, all those all those things. And the wages are going to vary by your area and state. If you have a temporary agency in your area, generally they’ll have salary guides. Or you can look at job postings, services like Indeed, Zip Recruiter and see what other people are offering. The other thing that you’ll want to make sure is when you are hiring, if you’re hiring someone to do reconciliations is that someone has experience with Trust Reconciliations because that can go sideways very fast or they have the ability to learn. And then in addition, I would also ask your CPA, because often your CPA will know the rates for your area and they’ll know who’s qualified to help you with what you need. So that’s a really good resource as well.


Allison Williams: [00:11:51] Yeah. So I think there’s a lot of good, a lot of good information there about how to ultimately decide that. And compensation is one of the greatest costs that we have in the business. So we always want to make sure that we’re optimizing the quantity of production that we’re getting from the person that we’re, that we’re compensating when we are designing our compensation systems. So let’s, let’s shift now to talk about taxes. And I want to raise taxes because, you know, it’s one of those things we can’t avoid. It’s just like death, right? It’s gonna happen. It’s either going to happen to us. Or it’s going to happen for us or both. But taxes are definitely going to happen in business. So what does it mean when a business owner says, you know, we we know, we know business owners that will say, they don’t pay taxes because, you know, I’m paying taxes. You know, how is that possible?


Shawnna Weber: [00:12:42] This is a question we get a lot because there’s always a lot of conversations within friend groups or peer groups, things like, oh, I didn’t pay any taxes last year. And that’s really not the whole story. But it makes people nervous. It’s like, why am I paying taxes? But, you know, my friend over here, they’re not paying taxes. This doesn’t make sense to me. Am I doing something wrong? Am I overpaying? So I think that people should consider, when they hear this information from their friends or peers, is really that they possibly have one or more of these. Like following circumstances is they could be paying themselves through payroll and taking out enough withholding to not pay taxes. They could be making estimated payments so that at tax time there’s nothing to do or possibly they overpay and get a refund because that’s another conversation sometimes like, oh, I got money back. It’s like, OK, there’s all these circumstances that could cause that, but it’s really not ever, I’m not paying taxes. And also maybe they’re not profitable. Maybe they had a large loss and then also maybe they’re more aggressive with their write offs and that doesn’t… I mean, you want to take advantage of all the tax strategies that you can, but some people can get creative, overly creative and, you know, put themselves in an audit risk.


Shawnna Weber: [00:13:56] So maybe, you know, again, they may say, oh, I didn’t pay any taxes, but they get audited and then they have this large tax bill. So I think you really want to be careful on the information that people are giving you. And really all businesses are different. And again, they’re not really probably giving you their whole story. So it’s important that you know your own situation and be sure that you’re capturing all of your business expenses and sometimes some of the business expenses that we see that get missed. So I just want to put this out there. Is cell phone an expense? So you want to make sure that you’re taking care of that through your business. Business mileage. If your vehicle is not owned by your business, make sure that you are capturing the expenses for mileage. Home office expense. A lot of us have that have that now especially. And there’s a calculation for that. And then any supplies that you paid or any expenses you paid for the business that came out of your personal account, you really want to capture that so that you maximize the expenses that you did pay in your business.


Allison Williams: [00:14:53] Yeah, so a lot of good stuff there in terms of how we can start to look at maximizing the ability to write off. And I think it is interesting that you mention some people being creative. You know, we know that one of the big controversies of twenty twenty as if twenty twenty, needs any more controversy was the fact that our current president paid allegedly seven hundred and fifty dollars in taxes. And you know, when you say I paid X dollars in taxes, there’s often the assumption that that’s all you paid, not really taking into account money that was paid over the course of business. You know, if you’re paying payroll taxes, that often comes out simultaneously with the payroll. There are other ways that taxes get seeped out of the pot. It’s not just writing a check at the end of the year, even though I think we all know that if it’s only seven fifty, there is an issue there.


Allison Williams: [00:15:41] So there is more investigation for sure as we’re probably going to be investigating it over the next, however long. I won’t say the next four years because I don’t want to write history, but we’re looking ahead for some period of time now since we’re talking about taxes. This inherently implicates your accountant. And I’m a big proponent of telling our clients and Law Firm Mentor that you need to have a really good bookkeeper and a really good accountant. So we know that they serve a purpose, each of them. Can you talk to us about what each of them does? And then specifically for your bookkeeper, how frequently should you be meeting with your bookkeeper to get the information that the bookkeeper is going to provide?


Shawnna Weber: [00:16:23] Yes, so on the differences between your bookkeeper or accounting CPA, your bookkeeper is more transactional, so they’re making sure that all of those transactions are getting recorded where they need to be. And the CPA does a few things and a bookkeeper can kind of read the lines with strategy a little bit as well. But the CPA is really going to be looking at all the transactions that your bookkeeper has reconciled and they’re going to go in and help you with any tax planning strategies. And they’re also going to prepare your taxes and they’re going to do more of the high level accounting. So if you’re going to sell your business, what’s that look like? There is kind of a person in between a bookkeeper and a CPA like CFO who can help you with growth strategies or budgeting. And again, sometimes the bookkeeper will have advanced skills. So they’re going to, you know, help with more of that upper level. But really, you want that team at a minimum to be a bookkeeper and a CPA and they really need to work well together because if they’re not communicating, we find that that can be a little bit tricky.


Shawnna Weber: [00:17:28] And then if you need to add an advanced person kind of in the middle, you would look at hiring like an outsourced CFO who’s doing more of the planning. But we recommend meeting with your bookkeeper, at least on a monthly basis, or getting the information so that you can review it. Sometimes a bookkeeper will make an assumption on a transaction category and it might not be where you want it allocated. So sometimes you have something as simple as dues and subscriptions. But that may be, maybe you’re using CLIO and you put it there or the bookkeeper I’m sorry, puts it in the dues and subscriptions. But you really want to know what your software expenses are in total because you use a lot of different software probably and apps for your business. So instead of dues and subscriptions, which doesn’t really tell you a whole lot, you may want it in a different category. So it’s really important to look at the reports and tell your bookkeeper where you want things categorized if it’s different than where they’ve allocated it.


Shawnna Weber: [00:18:19] And reviewing your reports also keeps you really in the know on what’s happening in your business. A lot of times we also see if people are getting their books from their bookkeeper, but they’re not really reviewing that. There are recurring subscription expenses. So maybe they’re using something like Audible, but they’re really not listening to the books and they’re not taking advantage of it. So they’re paying for a service that they’re not really getting. And they could put this on pause or they could cancel it and put that money back into their business to utilize for something else.


Allison Williams: [00:18:49] Oh, God, that is such great advice. I can’t tell you the number of times I have personally gone into my account and said, what is this twelve ninety five that comes out every month like, oh crap, what is this, twenty nine ninety-five. And then you know, when you start adding it up, you start to see oh I’m spending an extra four or five hundred dollars a month on crap I don’t use. That’s just exactly because I thought I was going to use it for a month or two, put it on pause and you know, never really put it on pause. Right.


Shawnna Weber: [00:19:20] Right, and I think that’s a good tip is to put it on pause, maybe Audible, you have three credit stocked up and you are going to listen to it, but you don’t want to keep paying that fourteen ninety five again. I mean, that’s, you know, it’s coffee, it’s a it’s a lunch. It’s something but it’s not wasted. Yeah. And I would also say like when we’re talking about when we’re talking about meeting with your bookkeeper,


Shawnna Weber: [00:19:45] I would say meeting with your CPA is really equally as important and that can be less frequent. But I would say at least twice a year. And a lot of people think, oh, I just need it during tax time, but sometimes by tax time, it can be a little late to take advantage of any strategies. So we say please meet once towards the end of the year and then another at tax time. And, really you want to reach out when there’s any changes in your business. I mean, maybe you’re looking to purchase an office space or you’re adding another partner. Any major changes should be communicated so you don’t get to tax time, and your CPA is like, oh, if you told me that last year, I could have helped you with that. So.


Allison Williams: [00:20:18] Well, that is such great advice, really. You know, one of the things that I moved to when I, when my business got a little bit larger and I don’t know that it’s available for smaller businesses at the same level, even though we’re still looking for resources that have that, is this idea of having your accounting team and your bookkeeping team under the same roof and they don’t necessarily have to be in the same company, even though mine are. And I found that it’s really very beneficial because my bookkeeper is seeing transactions happening every single month and she’s running reports for us, but my accountant oversees her. So as a result, if I happen to not mention, oh, yes, I’m doing salary increases this month or if I happen not to mention we’re reconfiguring the way that we’re going to have a compensation structure for this type of employee versus that type of employee. There’s another set of eyes and ears that are catching it and another set of eyes and ears to communicate it to.


Allison Williams: [00:21:12] My accountant, so my accountant can shoot me a message and say, hey, I know that you just added three new team members and I know that you’ve got bonuses coming up at the end of the year or I know you’re going to be doing some some gifting through the company. Let’s figure out the best way to do that so that we can maximize your tax benefit. And if you have those two different professionals that don’t ever communicate, the bookkeeper is on one place, the accounting team is on another place, then you as the business owner have to really be intentional about bringing your financial team together to give you advice periodically. And it doesn’t take a whole lot to do that. I mean, it literally is just schedule yourself a quarterly meeting and invite them both to come and have everybody have access to the reports so that you can have those strategy sessions. Don’t be passive in trying to get advice for your business. You have to be intentional about seeking that.


Shawnna Weber: [00:22:01] Absolutely. That is excellent advice. Just spot on.


Allison Williams: [00:22:06] All right, so let’s move on to the next question, or actually this is kind of a follow up on your last question since you were talking about the reports, because there are a lot of different professional articles that I’ve read about which reports are the ones that a business owner should be looking at. And I have my thoughts about what law firm owners should be looking at in terms of their financial reports. But let’s hear it from an expert. What would you advise that a bookkeeper should be preparing for the business owner, as in your reports and the frequency? I think you’ve already said at least one monthly meeting, but how frequently should they be getting the different types of reports that that would be recommended?


Shawnna Weber: [00:22:41] I would definitely say monthly and I would say you’re going to definitely want a balance sheet. And in the balance sheet, you’re going to want you know, because it’s the the balance sheet is as of the date, it’s a number that accumulates. You want to also see on that balance sheet, if we’re running it, let’s just say for nine thirty, I would like the bookkeeper to also provide in that next column over what happened to say twelve thirty one of the prior year and the change. So I can really get an idea of what’s changed since the end of last year versus this current period. I would also want to see a profit and loss this year versus last year.


Shawnna Weber: [00:23:16] Again, if we’re doing nine thirty, we want to make sure we were looking at the change in that period, but also a profit and loss by month. And this is really important. If I, if you just give me a profit loss that says September, I mean, that’s helpful because I know what’s happening that month, but I can’t really see the trends that have occurred. And this is, we see this a lot where, you know, did you miss a rent payment? Did you double up a rent payment in another month? Did you forget to pay a certain bill? So when you’re looking at that profit and loss by month, it really gives you an indicator of your trends. And if maybe something is missed or mis-allocated somewhere else, and then I would say even your general ledger. Now, I like the the general ledger is like the every, every transaction that occurred. I like to have this actually sorted by name. So it’s easy for me to look in the categories to see. And this is how I just kind of do my check. If I’m looking in office supplies. But I see, you know, ClIO is in there and it really should be somewhere else. It’s just really quick and easy for me to identify that it’s in the wrong category. But I, I would say, again, looking at these reports really helps you identify if there’s any things you’re not utilizing or any mistakes. You also want your trust reconciliation report. And I think it’s really important if your bookkeeper has access to it to let you know a last activity date. So CLIO, I mention CLIO here, but it has a report that you can see the last activity date. So you would alert you’d want your bookkeeper to kind of alert you to is there a trust account that maybe has activity over sixty days?


Shawnna Weber: [00:24:50] Do I need to take a look at that in case you need to get that back out to your client if you’re not going to be doing any work there, if you can have a cash flow report, that’s helpful as well, because a lot of times we have people that will look at the profit and loss and they’ll say, gosh, you know, it says I made five thousand dollars net income, but I don’t have that in my bank. Where did the money go? And the cash flow report really helps you identify where that goes because maybe you’re paying a vehicle and part of that money is actually on your balance sheet. And it came out towards your, you know, toward your loan amount. So those are really the key reports. I think it depends on if they’re doing your billing. But accounts payable and accounts receivable reports would also be reports that you’d want to add if you were, you know, putting AP in your accounts payable system. Some people don’t. They just write the check and that’s when they record it. And that’s fine. But also accounts receivable to know who owes you money so you can get that collected.


Allison Williams: [00:25:47] Yeah. So a lot of great information there on the types of reports that should be run. And one thing that I love that you said that I think is not given enough attention by law firms is the trends. And I know that it’s not given enough attention because almost universally with our clients, we have clients at this point all across the nation, more states than not in the US are currently reflecting in our membership. And when I ask lawyers, OK, so when do you collect the majority of your money? Or when do you see the greatest change, the greatest lower amount of money collected relative to the rest of the year? They can’t ever tell me. And I say to them, you know, here’s the thing, you know, so one of the things that we help them, we help lawyers to do here at Law Firm Mentor is to really develop their gut, their sense of their business, because people will have a fear about spending money and say, I don’t feel like I can afford that or I can afford it today, but what happens tomorrow? But if you get them into the habit of thinking, OK, third quarter is typically when I see a spike, fourth quarter is where I see a lull. Or first quarter is where we’re going to have a slower ramp up.


Allison Williams: [00:26:57] And then by the in the first quarter, into second quarter, that’s where the majority of our money is going to be made in this particular vertical. Then you can start to find ways of leveling it out. And by leveling it out, I mean, you have three or four different practice areas and let’s say family law is really kicking at the beginning of the year, criminal defense is really low at the beginning of the year, then you can start doing more marketing in your criminal practice, if that’s an area where you want to grow so that you don’t start to see these wild shifts in income. You can actually start to control where your income is coming in based on how you’re spending money on marketing and how you’re spending money on receivables throughout the course of that year. So I’m really glad you mentioned the trend because I think that’s really important.


Shawnna Weber: [00:27:43] Yeah, absolutely. What you just said, because I think it is you need to know that trend in your business. So, you know, when you’re going to spend the money and you start to know if if you’re, you know, you’re feeling a little stressed as far as the workload, you know. Can you afford another employee and really looking at the trends to see that seasonality.


Allison Williams: [00:28:02] Yeah. So the other thing that you mentioned was a cash flow report. And interestingly enough, here at Law Firm Mentor, our lead coach, Wolfgang, just created a training program for a member of our team. Actually, we decided to launch it for the whole membership on exactly that cash flow and managing cash flow so that you could get a handle on it. So let’s talk a little bit about that. If you were working with a client, a law firm owner who was, let’s say, spotty in their cash flow. Right. For the most part, they got their bills paid. But there are times where they’re barely eeking it out and don’t have enough to pay themselves. And in the next month they were kind of surging ahead again because of those wild fluctuations they haven’t controlled around. How do you help, how do you help them use a cash flow report to start making better decisions about when and how to spend money in the business?


Shawnna Weber: [00:28:55] Well, I think you use the cash flow report and really look at when those dips are, so again you’re kind of looking at trends and what you have coming up in the next few months. So if you have a month that has just, making up numbers here, you’re going to have a negative cash flow by two thousand dollars. But the next month you’re going to have six thousand dollars positive. You may want to even look at something as simple as credit card utilization. So maybe you are going to put it on your credit card in one month, but you’re going to pay it off in the next month because, you know, you just need that small amount to get by. If you’re having huge fluctuations in that trending of your cash flow, you definitely will want to look at, you know, maybe when the when the cash is high, saving the money for those next few months when it’s going to be negative or, you know, it’s like, are there things that you need to cut out in your business? And then you just have to get real with yourself. If you have a negative cash flow that’s trending, you know, do you have too many employees? Are you paying for services you really don’t need? Could you get creative and do something else? So we really look at those cash flows for the trends in the past, but also in the future and really see how we can help stabilize the cash or, you know, again, get a little creative if it’s just kind of a between a couple of months, how we can maybe utilize a credit card to pay bills and then just pay it off in the following month. So I think having that as a part of your program is amazing because, again, I, I see and our team sees a lot of people that show a profit, but their cash doesn’t reflect the same. And understanding that and having that trading is so vital. So I would definitely encourage our members to get on that like right away.


Allison Williams: [00:30:35] Yeah. So and you mentioned you mentioned this idea of like balancing it out. I think one of the things that I see a lot with Law Firm Mentor is the psychological resistance to looking at the numbers. Like there’s almost like if I don’t see it, then it’s not a real problem. And having a financial professional like you, helping them to look at it and have a more realistic approach is definitely something of value. So how do you, how do you counter a lawyer who either, you know, doesn’t show up? I mean, I don’t know if you’ve ever had this where you schedule the meetings and they kind of resist it or they just say, all right, tell me what I need to know. And they don’t necessarily want to dive in head first. How do you help them to see that they really have to be more proactively involved in the finances of their business?


Shawnna Weber: [00:31:21] Usually when we have the discussion, they mention kind of their pain points or something that they don’t enjoy or they look at the reports and they don’t really, I mean. It’s not their, it’s not their area of specialty, and so then they just avoid it. So what we do with our clients is when we go over the financials, we actually record it via a Loom video and do all the highlights. And that way, you know, our clients can look at it at their leisure. They can watch it multiple times because again, if I just send you a report, a profit and loss and you’re like, don’t want to do it anyway, you’re probably not even going to look at it. But, you know, if there’s some kind of video where it’s going over the highlights and recommendations, you’re more likely to take a look at that and then be in the know. But when you run a business, really good finances are unavoidable. That’s just a part of the business. And you really have to you talk a lot about this. A lot about this is really your mindset and you really have to work on your mindset to focus that these finances for your business are important. You started your business for many different reasons, I’m sure. Financial freedom, just lifestyle, freedom and business, you know, business success. But if you avoid those numbers, you’re not going to reach your goal. And if mindset is where you’re struggling with that it’s like I’m I mean, if I hand feed you your numbers and you still just put your blinders on, you know, I may not be able to help you with that, but you have to help yourself. And if you know that that’s an issue for you, working on those mindset things like through your programs or through, you know, anything you can do to help change your mindset or create a reward system. Maybe you hate looking at those numbers. So maybe the reward is you get to go do something fun for three hours after you do it. I mean, some anything that will change that mindset, I think that’s really the spot that needs to be worked on.


Allison Williams: [00:33:07] Yeah, and I love that you offer like a condensed version of it for your clients, because I think a lot of people, they see all those numbers, they see the spreadsheets and it’s like eyes glaze over and like the lights are on, but nobody’s home. And they’re just like they just kind of go through the motions and answering questions to get it over with. So anything that a professional can do to make it easier to digest, definitely high value. So one last question I want to ask, and I know you’ve given us a lot of really juicy tidbits about how we can be more financially informed and get our financial house in order. But if someone were kind of at that point of working with an accountant and they really want to maximize their tax planning and they want to implement strategies to get there, get them paying less in taxes legally, but also making better choices for their money, what are some of the tips that you might give to a business owner or Law Firm Mentor in particular as to how they can maximize their funds?


Shawnna Weber: [00:34:06] I think right now, these are some tips that people can utilize and we’re, you know, ending we’re in the fourth quarter and so these are things that you can do now or you can talk to your CPA about these strategies. But again, if you pay any business expenses from a personal account, you really want to reimburse yourself. And if you’re using a home office, you want to talk to your CPA about reimbursing yourself for all of those costs with the Home Office. I mean, for some people, that can be between four thousand and eight thousand per year. That’s really like tax free. So that’s a quick and easy one. And then if your children are working in your firm or if you can employ them in your firm, you want to talk to your CPA about paying your children, because a lot of times maybe your children are helping on the business. Maybe they’re doing filing, but you’re paying them from a personal allowance. Sometimes it can be more beneficial to pay them through your firm and have them file a tax return if over a certain limit. And this is definitely based on your individual circumstances. But at the tip, you should definitely if you have children that are like usually 10 or older, this is something that you might be able to utilize. And the other tip it’s really important for your S-CORP is to make sure that you’re paying yourself a reasonable salary and this is a requirement of your corporation and it’s also dependent on your profit.


Shawnna Weber: [00:35:22] So you want to make sure that you do the calculation and payment prior to year end to be in compliance. And the other thing we kind of see missed that is also important is if you are an S-CORP and you’re paying health premiums for yourself and your family through your through your firm, you need to add that premium. It’s called shareholder two percent health insurance. You need to have that added to your W-2 so you can deduct it from your personal return. You can. And you want to take that annual premium. And again, you can get that. You can email your broker or your health insurance, whoever you’re paying for that and get that annual amount. And if you have a payroll service, you just tell them, I want to add this to my two percent shareholder health insurance and they’ll take care of it for you. So don’t let it sound scary to you, but it’s important, important that you do it. And then also, if you’re a firm that’s a sole proprietor and you anticipate making over forty thousand dollars in net income next year, we would encourage you to set up a S-CORP or LLC with an S-CORP election starting in twenty twenty one. So there’s still time to do that, but it helps save in employment taxes.


Shawnna Weber: [00:36:26] So, you know, just those are some tips that I would say. And the last step is meet with your CPA before the end of the year just so you can implement any additional strategies that need to be handled before the year end. Because one of the other things that we see is if you’re cash basis and maybe you’re showing a little more net profit this year because, you know, I mean, maybe it’s just one of those years for you just by paying your bills a little early because cash basis expenses are captured when you pay them, you can actually help save yourself some taxes if there’s just a timing change. So maybe it’s a bill that’s due in January. And if you can pay for it in December, you might be able to capture that additional expense in twenty, twenty. And also but some people don’t know is that you can put it on a credit card. So if I want to buy a new computer before the end of the year, but I was kind of a little worried about my cash in December, but I knew what I had coming in in January. I could put that on a credit card in December. And that does count as an expense for cash basis when you charge it on the card, not when you pay it. So I think that’s a really good tip for people to know.


Allison Williams: [00:37:32] Wow. So there’s a lot of, a lot of great advice there. And for those of you that have been listening to the Crushing Chaos with Law Firm Mentor podcast for any length of time, you know, that we try to give you not just substantive value, but things that you can use today to make your Law Firm Mentor successful and Shawnna you definitely have delivered tenfold on that. And you mentioned a lot of things there, a lot of great strategies. But these are all strategies that if you have access to a financial provider, a financial planner or a financial advisor, I highly recommend that you reach out to your professional and have that end of year conversation. We’re going to make sure that we get this episode on, if not in late October, then certainly early November, so that you guys have this information available to you.


Allison Williams: [00:38:17] But it is so critically important that you enlist the aid of a professional like Shawnna to get your business and your financial house in order. Because one of the things that we as business owners do that I can’t stand and I am in this boat with you guys. We are so busy enjoying the business. Right. We we like to lawyer. We love to help people. We love to be in the weeds. And for those of us that don’t like to be in the weeds, we like to be in the management role. We are in some way fulfilling ourselves through our business. But the financial piece of it, just these little tweaks here and there can get us so much more for all that effort we’re putting in. And we are really losing opportunities to optimize our lives, our financial well-being and the financial well-being of those we employ when we don’t take care of these things. So just a word. Of advice to all of you, go out, get yourself a really good bookkeeper, get yourself a really good accountant and utilize them for all of the assets that they can bring to your business. I want to go ahead and again, thank our guest Shawnna Weber for her time with us today in Charlotte. If anybody wants to reach out to you to get more information about how your business can help them with these various different issues that we talked about today, where should they reach you?


Shawnna Weber: [00:39:29] We would love it if they would want to email us at Success at EdgySolutions Dotcom or visit us at EdgySolutions on the Internet and just fill out the Contact Us page. We are over on Instagram and feel free to DM us if you have any questions. We’re also for your audience offering, we have a deep dive that we do where we go in and we take a look at your books. We give you some advice if you want to do it yourself or if you’re looking at outsourcing, what do you need to do there. And there, I believe you’ll have a link in your show notes for that. But we will give a courtesy 15 minute phone call. If you just want to have a phone call, ask some questions, see if the deep dive is right for you. We would be happy to do that as a courtesy. And listen, I just wanted to say thank you so much for all of the valuable information that you provide your community, even if people who aren’t law firms are listening. It is excellent advice. And what you’re saying is just I’m, we’re advocates for our businesses. And you are just, I just value everything that you’re doing.


Allison Williams: [00:40:29] Well, thank you so much for that, Shawnna. And absolutely, we will have all of those contact links available in the show notes. And you guys take advantage of that deep dive. You know, it’s not often that you’re able to get in front of someone who knows what they’re doing, who has the expertise to help you, who can just take a quick and dirty look and tell you where to go. Because sometimes we don’t step in the right the direction of our solutions because we just don’t know what the options are. And having that, having that pathway is just so critically important and so helpful. So, again, Shawnna Weber, thank you so much for your time with us today. And everyone, thank you again for tuning in for the Law Firm Mentor, the Crushing Chaos with Law Firm Mentor podcast. As always, I am Allison William, your Law Firm Mentor. Have a wonderful day!


Allison Williams: [00:41:23] Thank you for tuning in to the Crushing Chaos with Law Firm Mentor podcast. To learn more about today’s guest and take advantage of the resources mentioned, check out our show notes. And if you own a solo or small law firm and are looking for guidance, advice or simply support on your journey to create a law firm that runs without you, join us in the Law Firm Mentor Movement free Facebook group. There you can access our free trainings on improving collections in law firms, meeting billable hours, enjoying the movement of thousands of law firm owners across the country who want to crush chaos in their law firms and make more money. I’m Allison Williams, your Law Firm Mentor. Have a great day!


00:19:45 (33 Seconds) – Shawnna

I would say meeting with your CPA is really equally as important and that can be less frequent. But I would say at least twice a year. And a lot of people think, oh, I just need it during tax time, but sometimes by tax time, it can be a little late to take advantage of any strategies. So we say please meet once towards the end of the year and then another at tax time. And, really you want to reach out when there’s any changes in your business. I mean, maybe you’re looking to purchase an office space or you’re adding another partner. Any major changes should be communicated so you don’t get to tax time, and your CPA is like, oh, if you told me that last year, I could have helped you with that. So.


00:21:12 (50 Seconds) – Allison

My accountant, so my accountant can shoot me a message and say, hey, I know that you just added three new team members and I know that you’ve got bonuses coming up at the end of the year or I know you’re going to be doing some some gifting through the company. Let’s figure out the best way to do that so that we can maximize your tax benefit. And if you have those two different professionals that don’t ever communicate, the bookkeeper is on one place, the accounting team is on another place, then you as the business owner have to really be intentional about bringing your financial team together to give you advice periodically. And it doesn’t take a whole lot to do that. I mean, it literally is just schedule yourself a quarterly meeting and invite them both to come and have everybody have access to the reports so that you can have those strategy sessions. Don’t be passive in trying to get advice for your business. You have to be intentional about seeking that.

Contact Info:

Contact Information for Shawna



We are offering a Financial Deep Dive for $999 which includes reviewing your 2020 year to date bookkeeping and making recommendations for classification and any strategies you can implement now or discuss with your CPA. To sign up for a complimentary 15 minute call about the offer go to edgewood business  or email us at

Shawna Weber Bio: 

Shawnna Weber is the host of the Faces of Finance podcast and the CEO of California based Edgeworth Business Solutions, a business consulting and bookkeeping firm that challenges the traditionally transactional model of financial management. Shawnna founded the company in 2011 with a goal of developing long lasting consultative relationships with clients that allow them to decrease their expenses while driving profitability. And in doing so, Shawnna and her team have managed over 60 million dollars in assets across their client base and have negotiated and implemented strategies saving companies over one million dollars over the past seven years.

About Allison

Allison C. Williams, Esq., is The Law Firm Mentor.  Law Firm Mentor is a Business Coaching service for solo and small law firm attorneys.  It helps lawyers to grow their revenues, crush chaos in business and make more money.  Law Firm Mentor was born out of Allison’s experience starting a law firm and scaling its revenues into a multi-million dollar business in only three years.  She shares her extensive knowledge of business, mindset coaching and entrepreneurship alongside her team in Law Firm Mentor.

Allison is also Founder and Owner of the Williams Law Group, LLC, with offices in Short Hills and Freehold, New Jersey.  She is a Fellow of the American Academy of Matrimonial Lawyers, is Certified by the Supreme Court of New Jersey as a Matrimonial Law Attorney, and is the first attorney in New Jersey to become Board-Certified by the National Board of Trial Advocacy in the field of Family Law. Allison is a member of the New Jersey Board on Attorney Certification (NJBAC) – Matrimonial Committee, a New Jersey Supreme Court committee that determines eligibility of candidates to be certified as a recognized practitioner in the field of matrimonial law.

Allison has been named a Rising Star Attorney by the New Jersey Super Lawyers franchise continuously from 2008 – 2013, and has been named a Super Lawyer by that organization for 2014 – present. In 2016, she was featured in the Super Lawyers publication (Williams v. The Rubber Stamp), she has been named one of the Top 50 Women Super Lawyers in New Jersey from 2017-2020 and in 2019-2020, was voted in the Top 100 Super Lawyers and Top 50 Women Super Lawyers in the State of New Jersey.

Allison is an accomplished businesswoman. In 2017, the Williams Law Group won the LawFirm500 award, ranking 14th of the fastest growing law firms in the nation, as Ms. Williams grew the firm 581% in three years. She won the Silver Stevie Award for Female Entrepreneur of the Year in 2017.  In 2018, Allison was voted as NJBIZ’s Top 50 Women in Business and was designated one of the Top 25 Leading Women Entrepreneurs and Business Owners. In 2019, Allison won the Seminole 100 Award for founding one of the fastest growing companies among graduates of Florida State University.

In 2018, Allison created Law Firm Mentor, a business coaching service for lawyers. Through multi-day intensive business retreats, group and one-to-one coaching, and strategic planning sessions, Ms. Williams advises lawyers on all aspects of creating, sustaining and scaling a law firm business – and specifically, she teaches them the core foundational principles of marketing, sales, personnel management, communications and money management in law firms. 

She received her B.S., magna cum laude, and her M.S., summa cum laude, from Florida State University. She received her J.D., cum laude, from Syracuse University College of Law.